The production of India’s eight major industries remained flat on a year-on-year basis during January 2021.
The Index of Eight Core Industries’ reading for last month showed a rise of just 0.1 per cent in output from an expansion of 2.2 per cent in the same month last year.
On a sequential basis, the output of eight major industries had expanded by 0.2 per cent in December 2020.
ECI index comprises 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
These industries comprise coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity.
On a sector-specific basis, the output of coal, which has a weight of 10.33 per cent in the index, showed a decline of (-) 1.8 per cent in January 2021 over the same month of the previous year.
Similarly, the output of refinery products, which has the highest weightage of 28.04, declined 2.6 per cent compared to the corresponding month of the last fiscal.
However, electricity generation, which has the second-highest weightage of 19.85, increased by 5.1 per cent, whereas the steel production was up 2.6 per cent last month.
The extraction of crude oil, which has an 8.98 weightage, declined by 4.6 per cent during the month under consideration.
The sub-index for natural gas output, with a weightage of 6.88, fell by 2 per cent.
Cement production, which has a weightage of 5.37, slid by 5.9 per cent in the month under review.
In contrast, fertiliser manufacturing, which has the least weightage — only 2.63 — grew by 2.7 per cent.
“The core sectors eked out a marginal YoY rise of 0.1 per cent in January 2021, benefitting from an expansion in electricity, fertilisers and steel,” ICRA’s Principal Economist Aditi Nayar said..
“Disconsolately, the other five core sectors recorded a contraction, and the overall growth eased a tad from the upwardly revised yet equally lacklustre 0.2 per cent in December 2020.”
According to Sunil Sinha, Principal Economist, India Ratings and Research: “In FY21 core infrastructure industries have shown growth in only three months namely September, December and January and at cumulatively contracted 8.8 per cent during April 2020-January2021.
“If core infrastructure industries growth is an indication then IIP growth in January 2021 would barely manage to be slip into positive territory.”